Sky takeover close after more conditions
June 30, 2011
By Colin Mann
Jeremy Hunt, the Secretary of State for Culture, Olympics, Media and Sport, has finally published the results of the consultation launched on 3 March on the undertakings in lieu offered by News Corporation in relation to their proposed merger with BSkyB. Alongside this he has also published subsequent advice from Ofcom and the OFT and has set out the next steps in the process.
The undertakings published on 3 March 2011 involve Sky News being ‘spun off’ as a separate company, operating independently from BSkyB. The Secretary of State, based on advice from the OFT and Ofcom, had said he was minded to accept the undertakings in lieu of a reference to the Competition Commission.
The consultation produced no new information to cause Ofcom and the OFT to change their earlier advice that the undertakings in lieu addressed Ofcom’s media plurality concerns and were viable for 10 years. However, a number of suggestions were made which could further strengthen the undertakings. As a result, Hunt has published what are described as “a revised more robust set of undertakings” for consultation.
The changes, which are set out in full in the revised undertakings , include:
– The need for Sky News board meetings to include an independent director with senior editorial and/or journalistic expertise if decisions on editorial matters are to be made.
– The appointment of a monitoring trustee whose main role is to ensure that News Corp complies with the undertakings in the run up to spin-off.
– A requirement for Sky to continue to cross-promote Sky News on its channels.
– A requirement for Sky News’ Articles of Association to be approved by the Secretary of State.
Hunt said he had considered carefully the points raised and, as at all steps in this process, taken advice from the independent regulators. “The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality. I could have decided to accept the original undertakings but a number of suggestions were made in response to the consultation which could further strengthen the undertakings, particularly around editorial independence, business viability and the articles of association. I am therefore proposing some changes to the undertakings and I will now hold a further public consultation.”
The consultation period on the revised undertakings will run until midday Friday 8 July.
More than 40,000 representations were received in response to the consultation, including a very large number of near-identical responses as a result of Internet campaigns. The Secretary of State also met representatives from Trinity Mirror, the Guardian Media Group, the Telegraph Media Group, Associated News and Media, Slaughter and May and Avaaz. The substantive points raised were considered carefully by the Secretary of State, advised by the regulators.
The Secretary of State is required to look at the specific issue of media plurality related to the merger (competition issues having already been dealt with at European level).